World Will Feel Aftershocks of Brexit for Years to Come

Britain’s exit from the European Union is expected trigger increased volatility in global markets for months and years to come.

Fears of the fallout were immediately manifested in global financial markets Friday, which lost about US$2 trillion in value, while the British pound suffered a record drop to a 31-year low. U.S. stocks witnessed their worst performance in 10 months. Here at home, the S&P/TSX Composite Index closed down 239 points.

Investors were clearly caught off guard by the outcome, selling off risk assets and heading to safety. The yield on the two-year Treasury dropped 0.28 percentage points, the most since 2008, signalling investors were driving prices up as they rushed to buy the safe-haven asset (bond yields and prices move inverse to each other. Read More…